Genmab A/S (GMAB) 2003 Q2 法說會逐字稿

Good evening and welcome, ladies and gentlemen, to the Genmab conference call. At this time I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation.

During this telephone conference, you may be presented with forward-looking statements. Actual results may differ materially. Genmab is not under any obligation to update statements regarding the future, nor to confirm such statements in relation to actual results unless this is required by law.

At this time I would like to turn the conference over to Dr. Lisa Drakeman. Please go ahead, Dr. Drakeman.

Good evening and thank you all for joining the Genmab results conference call. Hopefully, you have all received the results by now. We sent the press release out about an hour ago and you will see that we have guided downward in terms of our cash burn and also our operating and net loss. Consequently, we expect at the end of the year to have over a billion kroner in cash and at the-- that means at the burn rate that we're currently experiencing, we would have three years of cash.

We do not have a budget yet approved for next year, so I can't give you any specific guidance, other than to just say that management is being very careful with expenses.

I think-- I'd also like to point out the biggest highlight of the quarter, which was Amgen exercising its option to HuMax-IL15 before Phase II results were available. We think this is a plus, not only because they're taking care of all development costs going forward but also because it's a vote of confidence in the Genmab team.

I'd like to open up the call to questions now. We also have Claus and Jan with us in case any of you have any more technical questions, as well as Joe Josbe, who is our Chief Accounting Officer.

Thank you, Dr. Drakeman. The question-and-answer session will begin at this time. If you are using a speaker phone, please pick up the handset before pressing any numbers. Should you have a question, please press star-one on your push-button telephone. If you wish to withdraw your question, please press star-two. Your question will be taken in the order it is received. Please stand by for your first question.

The first question comes from Patrick Fuchs with DZ Bank. Please state your question.

Hello. I have a question regarding the revenues of DKK65m. Do they come from-- are they part of the milestone from Amgen?

They are the payment from Amgen. That's exactly what the revenue is.

OK. Second question is concerning the Phase IIb trial of HuMax-CD4 for psoriasis. You mentioned complete patient accrual. When can we expect data from that trial?

Well, the last patient has not yet completed the last visit in that study. We expect that to happen in early September. So we have projected that we will have data in the fourth quarter. After the last patient finishes, obviously, we need to complete the database and analyze it.

OK. Thank you.

The next question comes from Sally Bennett with ING. Please state your question.

Hi, it's Sally Bennett. Just a couple of questions, if I may. First of all, just on the Amgen option, unfortunately I missed that conference call. But I'm just wondering, I know you got $10m up front. In terms of the Phase IIa trial, I had in that you were going to be spending about $5.5m. Will any of that be reimbursed going forward?

Just secondly, I know a deal you did in the past with Scancell, I know you're no longer jointly developing anything, but I'm just wondering, did you actually retain-- did you actually manage to develop any antibodies to that Lewis y/b antigen? Do you retain any rights, royalty rights, if you did? It's just that I noticed that Celltech now has rights to evaluate their antibody family.

Well, let's start with the Phase II. All development costs are the responsibility of Amgen starting with July 1st. At present we have a transition team, an Amgen/Genmab transition team that's evaluating the Phase II study. The original design of that study was for 100 patients. The goal was to provide more information to Amgen to help them make up their mind about the product. We've already reached that goal, so the transition team is looking at the study to make a decision about what to do with it.

I think we will, hopefully, know more in the relatively near future, within a month or so, about how that will affect our financials for yearend. There's no allowance in this forecast for any significant reduction in the study. That's still-- because we can't predict what's going to happen there accurately yet. But we will not be spending more money on the study as of July 1st, either, so we just have to wait and see how that works out.

Then on the Scancell, I think we have said publicly that we've stopped working on the Lewis y/b target. We did not make any antibodies to that target. We're aware that Celltech is evaluating all the Scancell materials and we do retain some rights in that area. I can't really say publicly any more than that, other than we do have some rights regarding the target.

Sorry, can I just follow up with a question. On IL15, sorry, I'm not quite clear. Is the Phase IIa still ongoing then?

Nothing's happened with it at present. It's still going on and patients are still being treated and Amgen and Genmab are talking about what the right thing to do with that study is and there are all kinds of options. We just have to make a decision about what moves the development program forward in the best way and that's why I'm saying we can't really say whether we'll simply-- whether we'll enlarge it, whether we'll make it smaller, whether we'll make it shorter or longer. There's just-- these are the kinds of things that are being discussed now.

And did you say that will be announced within the next month?

No, I said we hope to have the news shortly and I said, hopefully, it would be within a month or so. I can't really predict exactly when that will be done because the transition team has to finish its work.

OK. Thank you.

The next question comes from Annette Larsen with Carnegie. Please state your question.

Yes. It's Annette Larsen from Carnegie. I have three questions. The first is regarding your new guidance. The changes-- are the changes solely reflecting that Amgen has exercised the option on IL15 or are there other reasons behind that? My second question is if you can comment anything about what you expect from investments or cap ex in the 2003 in the guidance that you had given of your cash position yearend?

And then the third question regards to the deal that you have made on Connex and INSERM. You mentioned that there's an initial payment of $1m. Is that $1m to each or $1m in total?

OK. Let's start with that question first. To the best of my knowledge we've made $1m in total. Isn't that correct, Joe?

That's correct.

OK. So between them they share $1m. I'll ask Joe to answer the cap ex question between now and the 2003.

The question is was the estimate of our cap ex spending?

Yes, in the next six months.

What you have assumed for your projected cash balance, yes?

Yeah. It's-- I think as you can see on our cash flow statement, we have so far year to date it's been approximately DKK17m and I think for the full year-- it'll be somewhat less than that for the second half of the year.

OK.

OK. Then finally, let's go back to your question about the guidance. The guidance is the result of a number of things. We have had revenues from Amgen. We have looked very carefully at our budget. In some cases, we've reduced some of our spending; in some cases, we've increased. For example, when we had the opportunity to license in the hepatitis C antibody.

So it's a reflection of acceleration of programs or a new program in some cases and, in other cases, if you just look, for example, at G&A you see that we're down over 30% so far this year compared to last year. We're working really hard to control our costs.

All right. OK. Thanks very much.

The next question comes from Samir Devani with Altium Capital. Please state your question.

Hi, Lisa. Just a couple of questions. There's clearly going to be a substantial ramp in R&D in H2 and I was just wondering if you could break down a little bit for us how that spend is going to spread over which projects? And the second question is just if you can update us on how the search for a new CFO is going?

OK. Second half-- you know, we filed the IND for HuMax-EGFr. We expect to start treating patients pretty much when the summer holidays are over, so, you know, at the end of this month, beginning of next month.

We'll also receive some material for HuMax-CD20 so that we can start to work on the IND and the clinical trial for that. Obviously, we've started to work on the IND. I said that wrong.

In addition to that, I think we will have the regular, ongoing projects. You know, we have the six clinical focus programs. We have a lot of work going on in the preclinical side.

In terms of the CFO, what Genmab has been doing since Michael announced his resignation is carefully assessing our internal resources. We have a very strong finance department. I think this is the first opportunity any of you have had to speak with Joe Josbe [ph], who is our Chief Accounting Officer. And in consultation with the board, we've decided to continue to evaluate how well we are able to manage all of our responsibilities with our existing team.

So at present we have not started a search for a CFO. I think that we've decided we'll take that up again with the board at our meeting in the fall when we've had a little more time to look at how things are going. I think, again, thinking about controlling our costs, we have a strong team and we're going to continue to evaluate whether, at this point in time, we need to add to it or not.

Can I just come back to the Phase IIa trial, the main study?

Sure.

I was a bit confused as to whether you were indicating that the costs for that study are within that guidance for H2 or whether you are still trying to negotiate what's happening with that?

We made a very small reduction in the projected budget, very, very small, almost not really material. We decided not to put an allowance into the guidance because we just don't know what's going to happen here. We do not expect to spend our own resources. The question is whether, for example, we might receive some extra reimbursement from Amgen if they asked us to carry on work, things like that.

So at present, it's very hard for us to predict exactly what will happen. But I think the only thing that can possibly happen, really, is the budget will be affected in a positive direction because they are responsible for the ongoing costs. I just can't tell you exactly how much money that represents.

OK. So how likely do you think it will be that they'll ask you to expand that trial?

I don't-- there's absolutely no way to tell. The team is exploring a lot of alternatives right now and I think it's just too early to say. They-- Claus, when did you have your first meeting? Two weeks ago?

Yeah, something like that.

So it's just too early. They're just looking at all the possibilities and, you know, we have to do the best we can to make a plan that will move the product forward and that's what the team is trying to do.

OK. That's great. Thanks.

Once again, ladies and gentlemen, if you do have a question, please press star-one on your push-button telephone at this time. If there are no further questions, I will turn the conference back to Dr. Drakeman.

I'd really like to thank you all for joining us today. I know it's very late for those of you on the Continent. It's only an hour early in London and I really appreciate it.

You know, be sure and tell us if this worked for you because our other alternative was to do something very early in the morning tomorrow, but that would mean our colleagues in the United States would have trouble joining us. So we'd be happy to get any feedback on the timing of the calls and, again, we appreciate your taking the time and your interest in Genmab.

Thank you and good night.